Local officials have released a plan to eliminate the long-ailing Philadelphia School District and rebuild from the ground up.

“What we do know through lots of history and evidence and practice is that the current structure doesn’t work,” said School Reform Commission Chairman Pedro Ramos. “It’s not fiscally sustainable, and it doesn’t produce high-quality schools for all kids.”

Insolvency, poor academic achievement, and parents’ concerns over safety are primary reasons to act, he said. SRC’s chief recovery officer, Thomas Knudsen, released the reorganization plan in late April. It would close 64 poorly performing schools over five years, starting with 40 schools in 2013, move thousands of students to charter schools, and replace the central district office with several decentralized “achievement networks” that would compete to run schools and sign performance contracts.

“If we don’t close these schools, and we just keep them up—and a lot of them have very low utilization—we’re blowing about $33 million,” explained the SRC’s Chief Recovery Officer Thomas Knudsen. “We can’t afford that.”

The current 2013 district budget shortfall is $218 million and, left unchecked, is projected to grow to $1.1 billion by 2017. Philadelphia is one of the lowest performing school districts in the nation.

Ending Top-Down ManagementInstead of the current school district’s central office, which runs 249 schools, achievement networks would compete to manage groups of 25 schools.

District staff would be reduced from nearly 1,000 to 200 employees, who would manage compliance, finance, accountability, strategic planning, and government relations.

Effective principals, district staff, charter organizations, universities, or a combination of these would apply to run the networks. Pilot networks would begin this fall, with a district-wide rollout in 2014.

This “breaking-apart of the district,” according to Knudsen, would give schools more autonomy, which “creates an entrepreneurial approach, a flexibility, a nimbleness, [and] a willingness to experiment.”

Charter School Expansion Crucial Charter-school expansion will be crucial to building the networks. Currently, about 25 percent of Philadelphia’s 200,000 students attend charters. That number is expected to reach 40 percent by 2017.

“If we don’t take significant action, the system will collapse,” said Philadelphia Mayor Michael Nutter. “If you care about kids and if you care about education, if you care about the future of this city, that’s what we need to all grow up and deal with.”

Closures Generate ControversyThe prospect of closing up to one-quarter of the district’s schools angered Philadelphia Federation of Teachers President Jerry Jordan, who blasted the reorganization as a “cynical, right-wing, market-driven” scheme.

By directing resources to performing schools and closing the rest, “the SRC demonstrated its focus on the most important factor for children and families: school quality,” disagreed Helen Cunningham, who serves on the board of directors for the Philadelphia School Partnership. She hailed the SRC’s decision to close schools as “a new era for the nearly 200,000 students who attend Philadelphia’s public schools.”

The PSP, a nonprofit that helps expand high-performing schools, has started raising funds in anticipation of the school closures. PSP executive director Mark Gleason praised the reorganization as “a very bold attempt to…start allocating resources in a way that puts student interests first.”

Union Concessions Necessary“This sounds pretty good on paper,” particularly the achievement networks, said Jake Haulk, president of the Allegheny Institute for Public Policy. “The devil will be in the implementation details,” including union negotiations.”

“The School District has reached a point where it will either achieve fiscal sustainability and succeed at providing safe, high-quality schools or it will become a mere social program,” Ramos said.

Schools would get an additional $90 million under the mayor’s budget. Savings from school closures would narrow the district’s budget gap by $33 million. Additional savings would have to come from wage and benefit concessions from local unions, including the PFT.

“[The reorganization] will be tough to put into place,” Haulk said. “But I say to the Reform Commission and the mayor, ‘Go for it.’”